Many people fear the bankruptcy process unnecessarily. The truth is that much of what people fear about bankruptcy is related to myths and misconceptions about the process. The best way to combat false information is through consumer education. Understanding what may be expected of you before and after filing for bankruptcy is your best weapon against debt and undesired outcomes.
Before Bankruptcy
Many people enter the bankruptcy abruptly and without taking the time to plan for the process. While the process isn't inherently tricky, there are certain rules and guidelines you will be expected to follow. Making a mistake before, during or after bankruptcy can jeopardize your case and lead to a dismissal, leaving you without the debt relief needed.
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The first thing to consider before filing for bankruptcy is whether or not the process is right for you. Have you considered other options such as a debt management plan or debt negotiation? Is your financial hardship expected to be long term? If you answered 'no' to either of these questions, you may want to hold off on filing for bankruptcy until you consult an attorney.
Your financial situation isn't just important for determining whether bankruptcy is your best option, but also how your case will be handled. Understand that the court will require a detailed report of your financial history in order to determine what you may be required to repay or how your debts will be resolved. You will be required to list your debts, income, assets, fund accounts and financial transactions. Having the documentation to provide proof of this information organized and ready to present the court at the time of filing can save you valuable time.
There are some actions that could influence the outcome of your case and your behavior prior to filing will be examined. Paying off debts, acquiring more income or debt and moving assets before filing are all examples of certain behavior that may be considered suspicious by the court. Paying off debt or increasing your income before filing could disqualify you from being eligible for a Chapter 7 case. Accumulating more debt or moving and selling assets could be viewed as fraudulent by the court and lead to dismissal. The general rule is to freeze all unnecessary spending, keep assets in place and limit your debt payments to minimum for at least 180 days before filing.
After Bankruptcy
What is expected of you after bankruptcy isn't much, but it is extremely important to your financial future. Although you have had your debts resolved through a bankruptcy filing, your credit is most likely in disrepair. It is important that you check your credit report to ensure the latest information has been reported showing that your accounts are no longer considered delinquent and are in good standing. Also, begin to take on new credit, but keep balances to a minimum. Your goal now is to demonstrate a responsible payment history over the period of 12 or more months to maximize your credit score.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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